Third-quarter GDP growth likely in for a shave

WASHINGTON (MarketWatch) — The U.S. probably didn’t grow quite as fast in the third quarter as originally estimated, but that’s unlikely to prevent the economy from posting another solid performance in the waning months of 2014.

Economists polled by MarketWatch predict gross domestic product will be shaved to 3.3% from 3.5% when the government updates its third-quarter figures for the first time. The revised GDP report will be issued Tuesday at 8:30 a.m. Eastern.

Milder growth in exports and business investment are seen as primary reasons for the downward revision.

Consumer spending, on the other hand, still appears to have been fairly firm in the third quarter and a bevy of reports point to an increase in household purchases in the last three months of the year. Consumer spending drives more than two-third of U.S. economic activity.

Another clue on household spending patterns could emerge from the consumer confidence report for November that comes out later in the morning. Consumer confidence is already at the highest level in seven years, so the pickup in hiring and sudden plunge in gasoline prices could add to the optimism.

A pair of reports on housing, meanwhile, are likely to show that prices are not increasing quite as fast as they were earlier in the year. While a slower increase in home prices stems in part from so-so demand, houses would also become more affordable and that could improve sales.

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